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Entrepreneurship

The University of Cambridge, one of the world’s oldest seats of higher learning, is rediscovering its vocation as a hub for cutting-edge technology – apparently at London’s expense.

Although the Cambridge area still accounts for a modest slice of total venture capital investment in the U.K., VC funding in the region jumped 21% to £23 million in 2012. Meanwhile, VC investment in London declined slightly, to £126 million, over the same period.

These numbers may be small by global standards (by comparison, Silicon Valley VC firms invested £18.4 billion in 2012), but hi-tech observers are paying attention.

It turns out that VCs are more interested in the technological innovations that have been a mainstay of Cambridge for decades, and possibly less enthralled with the e-commerce and social-media plays that have lured VC money to London’s tony Shoreditch tech hub in recent years.

Cambridge has long been a seat of technology in the U.K. Chip designer ARM Holdings, whose market cap of £13.9 billion tops the U.K. tech sector, is headquartered there.

While VCs will always be attracted to consumer-oriented technology like games, websites and iPad apps, some eventually will find their way back to companies like those around Cambridge solving complex technological riddles.

Tech types in London have noticed this trend: they’re pushing for an express train connecting Shoreditch’s “Silicon Roundabout” to Cambridge.